• Journal of Energy Engineering
• /
• v.21 no.3
• /
• pp.301-308
• /
• 2012

This paper attempts to estimate the demand function for the transport LPG and to analyze long-run and short-run price and income elasticities. In addition, the paper measures consumer surplus and economic value ensuing from the transport LPG consumption by utilizing the estimated long-run price elasticity. The price and the income data are the monthly real transport LPG price and the monthly composite index adjusted by real transport LPG price from 2003 to 2012. Unit root test, co-integration test and error correction model are to take the procedure of estimation of demand curve. The demand for transport LPG is considered to be inelastic and the long-run demand is more elasticity than that of short-run. Price elasticity of demand estimate here is -0.422, and the estimated consumer surplus and economic value in 2010/03 are 966 and 1,781 billion won, respectively.

• Journal of the Chungcheong Mathematical Society
• /
• v.33 no.2
• /
• pp.181-195
• /
• 2020

This paper suggests the price of vulnerable European option under a constant elasticity of variance model by using asymptotic analysis technique and obtains the approximated solution of the option price. Finally, we illustrate an accuracy of the vulnerable option price so that the approximate solution is well-defined.

• Environmental and Resource Economics Review
• /
• v.13 no.4
• /
• pp.593-619
• /
• 2004

This study analyzes the interfuel substitution of energy demand in Korean manufacturing sector using static and dynamic linear logit models. For the period of 1981~2002, this study uses petroleum, electricity, natural gas and coal as energy sources. According to the empirical results, firstly, the own-price elasticity of coal has been increased steadily even though its elasticity is smallest compared with those of other energy sources. On the other hand, price elasticity of natural gas is largest, but its value has been decreased after 1997. Price elasticities of petroleum and electricity are very stable over the sample period. One of the main features in trends of interfuel substitution is as follows. Substitution effect of a change in price of natural gas on both petroleum and coal has been increased especially after 1997. The implication of the empirical results is summarized as follows: First, the fact of inelastic own-price elasticity of petroleum implies that the dependency of Korean manufacturing sector on petroleum and coal will be persistent even in a sharp fluctuation of petroleum price. Second, the effects of price increase in natural gas on demand for petroleum and coal are very significant. Thus, price decline of natural gas rather than price declines of coal and petroleum could be more effective as an energy price policy for the reduction of $CO_2$ emission. The assessment on this implication will remain for future researches.

• Environmental and Resource Economics Review
• /
• v.22 no.2
• /
• pp.251-279
• /
• 2013

Prices of oil products such as gasoline and diesel are deregulated since 1997 while electricity price is still controlled by government. This difference may explain recent discrepancy in the patterns of demand for oil products and electricity - constant increase in electricity consumption and stagnant demand for oil. To verify it empirically, we estimate price and income (production) elasticity of demand across time by using a rolling regression with 10 year-window based on monthly data for 1981-2011. Estimation results show that the sensitivity to price in demand for gasoline and diesel has increased since mid-90s while the elasticity of demand for electricity has become smaller. Second, income (production) elasticities of demand have shown no significant changes for both oil products and electricity. Third, cross-price elasticity was found meaningful only for gasoline before mid 1990s and for diesel after then.

• Management & Information Systems Review
• /
• v.36 no.4
• /
• pp.81-102
• /
• 2017

This study examined the income and price elasticities of tourism demand model by using the ARDL models. This paper used the ARDL & ARDL-RECM model based on the annual number of tourists arrivals, GDP and CPI including tourists from the US, Japan and China entering Korea. First, the income elasticity of the US was inelastic and insensitive necessities for long-run US tourists in the ARDL model. China's income elasticity was elastically sensitive luxuries. Second, the US and China's own price elasticities were very elastic to tourism demand in both models. Third, the US's cross price elasticity showed the relationship between inelastic positive substitutes and inelastic negative complements in China in ARDL model. The cross price elasticities of the US and China showed inelastic positive substitutes in the ARDL-RECM model. Fourth, the coefficients of the error correction term were such that the actual sign and the expected sign of the US and China coincided with the negative sign in the ARDL-RECM model. Therefore, first, it can be established in a tourist policy or tourism strategy through income elasticity. Second, we can improve the quality and differentiation of products, recognizing that Korea's tourism price is more elastic than other markets through price elasticity.

• Journal of the Korean Society of Clothing and Textiles
• /
• v.36 no.12
• /
• pp.1285-1296
• /
• 2012

This study investigates the effects of changes in price, total consumption expenditures and economic sitations on Korean household demands for clothing and footwear using time-series data. The clothing and footwear category was reclassified as clothing, footwear and clothing services items for the demand analysis. This study utilized the Linearized Almost Ideal Demand System (LAIDS) model to analyze household demand. The results indicate that price and total consumption expenditures are significantly related to Korean household consumption expenditure allocations for clothing and footwear items. The effects of the IMF bailout crisis in 1997 and the global financial crisis in 2008 on household expenditure shares for clothing and footwear items were very weak and statistically insignificant. All the demand elasticities were estimated with respect to total consumption expenditures and prices. Clothing was expenditure elastic (greater than one) and other items were classified as inelastic. All the own price elasticities of demands were negative (other than clothing). Through the estimations of cross price elasticity the relationships between the demands for items and other item prices were evaluated (i.e., substitutes and complements).

• KIEE International Transactions on Power Engineering
• /
• v.5A no.4
• /
• pp.403-411
• /
• 2005

At present, the Cournot model is one of the most commonly used theories to analyze the gaming situation in an oligopoly type market. However, several problems exist in the successful application of this model to the electricity market. The representative one is obtaining the inverse demand curve able to be induced from the relationship between market price and demand response. In the Cournot model, each player offers their generation quantity to obtain maximum profit, which is accomplished by reducing their quantity compared with available total capacity. As stated above, to obtain the probable Cournot equilibrium to reflect the real market situation, we have to induce the correct demand function first of all. Usually the correlation between price and demand appears over the long-term through statistical data analysis (for example, regression analysis) or by investigating consumer utility functions of several consumer groups classified as residential, industrial, and commercial. However, the elasticity has a tendency to change continuously according to the total market demand size or the level of market price. Therefore it should be updated as the trading period passes by. In this paper we propose a method for inducing and updating this price elasticity of demand function for more realistic market equilibrium.

• Journal of Technology Innovation
• /
• v.14 no.1
• /
• pp.101-118
• /
• 2006

The relationship between R&D Polices(R&D subsidy, tax incentives) and firm R&D expenditures is analyzed through firm's profit maximization function. As a result, the relationship between R&D policies and fmn R&D expenditures is determined by the relationship between firm R&D expenditures and market price. In case of major innovation which cause the fall of market price, the elasticity R&D subsidy and firm R&D expenditures is negative(substitution). In case of minor innovation which cause the rise of market price, the elasticity R&D subsidy and firm R&D expenditures is positive(complement). Tax incentives is bring about the increase of firm R&D expenditures. R&D subsidy and tax incentives are substitutively influenced at firm R&D expenditures.

• Journal of Preventive Medicine and Public Health
• /
• v.28 no.2 s.50
• /
• pp.450-461
• /
• 1995

This paper tested by using Micro TSP, an empirical econometric analysis to approve officially a hypothesis of price elasticity of the demand for medical care services in Korean national medical insurance and the economic effect of health care delivery system with time-series datas of Medical Insurance Statistical Yearbook$(1981\sim1993)$. The results suggest that the Korean medical insurance system shows moral hazard due to the change of coinsurance and the economic effect according to intervention of the health care delivery system, but it is different by insurers regardless of the same structure of the medical insurance scheme.

• Journal of the Korean Regional Science Association
• /
• v.12 no.2
• /
• pp.59-68
• /
• 1996

Common belief in border regions holds that Mexican cross-border shoppers play a larger role in the regional economic base than they do and that NAFTA will provide a bigger stimulus to the regional economy than it is likely. In the regional economy than it is likely. In the first case, price elasticities are implicitly underestimated as highly inelastic and in the latter case, overestimated as highly elastic. This paper provides empirical evidence on the effects of distance and real exchange rates as price proxies on both field survey and population-imputed estimates of cross-border shopping. After estimating both distance-based and real exchange rate-based estimates of price elasticities of Mexican shopper demand for U.S. border-region goods, implications are obtained concerning the relative importance for U.S. border-regon economies of more distant Mexican markets, and the likely impacts of NAFTA.